The Non-Financial Value and Future Perspective of Social Media

The Non-Financial Value and Future Perspective of Social MediaThe Non-Financial Value and Future Perspective of Social Media is an extract of the interviews conducted for my master thesis on Social Media Business Usage with some of the world’s leading experts on social media.

You can find the previous parts of the interviews here: Are Your Marketing Efforts Really Aligned? World’s Leading Experts Answer,  Leading Experts Discuss Social Media ROI and Experts Discuss The Most Common Mistakes In Measuring Social Media ROI.

The questions are preceded by my initials KCP, Kelli-Carolin Parkja, and the experts’ answers are indicated with their names. To contact me, write to me: [email protected]

 The interviewees:

  •  Andrea Colaianni, Social Media Consulting Director, SAME SAME Agency,
  •  David Meerman Scott, Marketing and Leadership Strategist,
  •  Jay Baer, Social Media Strategist at Convince and Convert,
  •  Jen McClure, Senior Director, Social Media Strategist at Thomson Reuters,
  •  Michael Hopps, Social Media Specialist at Cisco Systems and
  •  Peter Kim, Chief Strategy Officer at DachisGroup.

 “I like to think of it not necessarily as financial versus non-financial metrics but short-term financial metrics versus long-term financial metrics” – Jay Baer

KCP: What is the non-financial value that you gain from social media and how do you measure it?

Andrea Colaianni: We can use three concepts to define the non-financial value of social media. Firstly engagement – today customers buy a product not only because they are really involved with a brand but because they are more involved with a trend. So social media is the only way to really engage the client in a long-term relationship. Secondly – reputation of the brand. Reputation is based on trust between the corporate and the brand with their customers. Today, the brand can have the possibility to reply and understand what is going on. The enterprise can also create a really strong crisis management program. This is a question of reputation and not about image. The third concept is innovation  –  enterprises and companies become more and more open. We call that “open innovation” or “open business”, meaning that enterprises can get a lot of information from clients and involve them in social co-creation with the company. The enterprises go more and more further in the market, so they can  innovate even more faster than before. The concepts to define the non-financial value of social media are innovation, reputation and engagement.

Jay Baer:  Probably the three best ones, all of which do in fact have financial value, but perhaps in non-traditional ways, are: customer loyalty, customer service efficiencies, and market research. I do not know that there is a tremendous amount of value, that cannot eventually be mapped back to financial. It is just whether you want to do the work to map it. Something like customer satisfaction that many people would say is a non-financial value, ultimately is a financial value, because customer satisfaction creates dollars over a longer period of time. So I like to think of it not necessarily as financial versus non-financial metrics but short-term financial metrics versus long-term financial metrics.

Jen McClure: It depends on the function. There is both non-financial and financial value of having a social intranet, for example. More people collaborating, less duplication of the same initiative happening in different parts of the company, or different parts of the world. We can see efficiencies gained that we can actually quantify the dollars saved through that internal collaboration. We see less travel because people are more effectively being able to collaborate online than they were before and we can quantify that. We can show those savings and efficiencies gained. So it’s non-financial, but it is financial too. We are looking to see if our employee engagement numbers will improve as one indicator that our employees feel they are in a culture where they are supported and encouraged to share their thoughts and ideas via this new collaborative platform. Employee engagement and retention impacts ROI. Internally, I think we are better able to tie our use of social to hard and soft ROI.

Externally, the things that we try to look for are: people talking about our brand more, people talking about our brand in a positive way, our customers sharing their delights over our products, they are coming out and sharing customer stories they have. Their sentiment is being assessed in ways it never could be before. Also, as our customer support organizations begin to use social as a channel to monitor and deliver customer service, we will measure our customer satisfaction numbers to see if those are increasing because people are finding that there are new channels to come through when they have a problem and that can be identified quickly. Those can lead to hard dollar numbers. When we understand our customers better and get more insight from them, then that results in real ROI.

Note: at the request of Jen McClure and Michael Hopps, the author points out that the answers by these two experts do not reflect the answers of their current employers but are based on their professional experience.

KCP: What is the non-financial value that you gain from social media and how do you measure it?

Michael Hopps: Customer insights are gained and measured through a compilation of multiple visualizations, that means anything from sentiment to influence rankings. Measurement visualizations can include: sentiment pie graphs, sample tweets/posts/quotes publicly posted, influencer rankings, share of voice charts, volume trend-lines and word clouds of top keywords in conversations.

I would like to look at companies’ tools like “Klout”. While Klout is a way in which a lot of companies look at social media influences, especially the aspect of managing influences, it is not the only way to measure influence. However, this tool provides a  pretty solid method of  measuring influence through three factors and providing an overall impact assessment of the user. Influence rankings is also something that Cisco likes to look at. Share of voice is another metric which Cisco or any organisation can use in order to learn how customers are perceiving their brand in terms of share of voice with other companies within the industry.

Note: at the request of Jen McClure and Michael Hopps, the author points out that the answers by these two experts do not reflect the answers of their current employers but are based on their professional experience.

Peter Kim: When we see things like increased employee satisfaction, for example. But today, I honestly think it can all be tied back to financial results. When you have increased employee satisfaction then you have decreased the costs of recruiting, you have less turnout with your company, so more efficient human resource operation, for example. Outside, when people feel better about a company, in many ways it translates to lower cost of customer acquisition. At the end of the day it does come back to the numbers.

KCP: What is the future perspective of social media in your enterprise and in general in the business scene in your opinion?

Andrea Colaianni: The perspective is to move with social media from the communication and marketing side to the business side in general. That means integrating social media into the work-flow. It cannot any more just be a part of the media department, it has to be integrated in all operational business of the enterprise. Integrating social media into traditional CRM – that is the only way it can become social CRM. We cannot think that using social media actually means using CRM 2.0. We need to really integrate it into the traditional part of the CRM and of the business. It does not only mean having a social media department or an agency to use social media for the enterprise, but that all employees should be engaged with the company´s communication through social media. In order to succeed in this communication, guidelines for using social media have to be created. An enterprise needs specific work-flow and it needs people to implicate social media.

KCP: Is there something you would like to add, something you would like to emphasize?

Andrea Colaianni: Thinking about social media only as something based on technology is short-sighted. We have to start to integrate social media to the enterprise and to transform the enterprise into a social business. That also means more and more people participating in co-creation of the business, of products, of ideas and the ways to build up the reputation through it. In order to help a business to transform from an enterprise to a social enterprise, one has to think about it in an “open business” way.

KCP: How can you do that?

Andrea Colaianni: We have to educate and work with the methodology and not focus too much on the communication process. We have to think about our enterprise internally and how we are collaborating inside. When you make a change management internally, then you can work externally in a better way. So first of all, one needs to have a change management internally.

KCP: What is the future perspective of social media in your enterprise and in general in the business scene in your opinion?

David Meerman Scott: When you think about what CRM is, then you realize that it typically started with sales. Basically, it aims to improve communication with the people who are your existing customers and your potential customers. If your customers prefer to be communicated with on LinkedIn or Twitter or in some other way, then you can interact with them in a way that makes sense to them. What you can do as an individual sales person or when running a sales team, is encouraging people to create information that helps to educate and inform their audience. When you do that in a way they expect, then this is incredibly valuable. So the idea of a CRM system (which has been around for a long time) combined with social is a very-very powerful combination. People naturally want to communicate with people in a way that makes sense to them. This is what that combination of social media and CRM allows.

KCP: Is there something you would like to add, something you would like to emphasize?

David Meerman Scott: This kind of marketing and this kind of communication can be a lot more fun for us. It can also be a lot more fun for our customers and potential customers too. Marketing used to be an adversarial thing where you would try to persuade someone into doing something. Being a marketer was not necessarily too much fun, because it was not fun to create a brochure or an advertisement. But interacting with people through social media is exciting. It makes our jobs as marketers more interesting. Ultimately, it makes the ways that people interact with companies more interesting and exciting for them also. So this is all good. We are in the middle of a revolution. It has really just started and it is pretty exciting that we are able to participate in that.

KCP: What is the future perspective of social media in your enterprise and in general in the business scene in your opinion?

Jay Baer: We are seeing huge advances on the software side. Software companies like Eloqua, Marketo and Salesforce are really making true social CRM a reality. On the enterprise side, whether you interact with someone via Twitter, telephone, or mail is irrelevant, it all gets stored in the same database. The next level is to map customers to their influence graphs, you are seeing that with companies who are using things like Klout and other social scoring mechanisms as built-in components of their CRM system. For example, when you tweet, the company looks at your Klout score and decides whether they should we respond to you immediately or should they respond to you in two hours, or four hours, based on your social influence and how many people you know. It is becoming the same way as we were looking at CRM and customer databases and looking at  lifetime value – here is how many dollars she spent with us historically, how many dollars we project that she would spend with us, so we need to send her more catalogues or give her a special phone number. The same thing is happening by combining social and CRM, but it is happening immediately. Your tweet pops up and your score is there. They decide yes-no-yes-no based on that instantaneously. It is exciting and interesting. Some people have a problem with it because it sets up the circumstance where every customer is not treated equally and that rubs some people the wrong way.

KCP: Is there something you would like to emphasize, to add?

Jay Baer: It sounds terribly basic, but we have to always remember that the goal is not to be good at social media, the goal is to be good at business because of social media and that is not the same thing. It is easy to lose sight of that, people get excited about Twitter this and Facebook that and LinkedIn this and Youtube that. Ultimately, you are trying to do something for your company. You have to think about it through that perspective.

KCP: What is the future perspective of social media in your enterprise and in general in the business scene in your opinion?

Jen McClure: I really do think that the value of social technologies and the concept of the social enterprise is beginning to become understood. Every function is becoming social. The tools are quickly catching up and soon social can touch every function. That is the future, and it’s not far off. We will quickly see those tools being perfected, during next five years they will be incorporated. This “social business” stuff is the hot topic right now, but as we see these technologies truly integrated into our businesses processes, it will just naturally become business as usual. We don’t talk about emailing any more, that just became part of doing business. The tools and technologies will continue to mature and evolve.

KCP: What is the future perspective of social media in your enterprise and in general in the business scene in your opinion?

Michael Hopps: I’d like to address this on two levels. Internally, focusing on how employees engage with an organization via social media, and externally, looking at how the company is able to deliver customer-facing PR campaigns via social media.

Internally within a company, I would like to refer back to responses #1 and #2 (link)  – how important it is to allow employees to communicate via social media at their work within a company. It is important to enable open environments, which allow employees to communicate and work freely. I would propose companies, which have blocked social media, to embrace it rather than try to block it.  Ultimately, higher quality talent will flock to the scene of an open workplace. That means especially anybody in their 20s and 30s, who have grown up using social media as a very common tool.

Externally, social media will eventually become an expected inclusion to the traditional CRM suite, it will become an add-on to the large existing CRM suites. One of the vendors that I would like to  mention in this case is Radian6. Radian6 is a tool which Cisco uses, it was acquired by Salesforce, a very traditional CRM client base, last year. Social media is going to be a very expected inclusion into any sort of traditional CRM platform like Salesforce. A lot of vendors will start modelling also off what Radian6 and Salesforce have done, an integration into creating a very wholesome Social CRM suite.

Other in-action deployments of a mature Social CRM include Pepsi and Gatorade as examples. Pepsi has taken social media monitoring and turned it into a “mission control centre,” which allows to view all of its visualizations in real time, “on the go”, and then roll them into reports for the  management. Another example comes from Cisco and that is our social media listening at “Cisco Live! UK” during January 2012. Ultimately, Social CRM is becoming the growing standard for customer service channels, and I’m excited about where this path is leading.

KCP:What is the future perspective of social media in your enterprise and in general in the business scene in your opinion?

Peter Kim: It is a good question. It is 2012 right now, when I was in Forrester late 2005, early 2006, we called it social computing. I would say that around 2007 or 2008, people were asking us questions because there was a spike in social media activities, so people understood that they could connect to each other, and were wondering what was next. There was the semantic web, the endless internet, people wanted to sort of fantasize, just like in the 1950s and 1960s in US cartoons like the Jetsons. What is next for social media, is maturity and operationalization of social media. In these early days from 2006 to 2009 or 2010, people did not know what they were doing. Someone had a blog and people got on Twitter or on Facebook and discovered that they can talk to companies and that they were talking back, there was a customer service, and that could integrated  into a marketing campaign. Other companies would get involved as the competitors were doing the same thing. Now we have got enough companies with enough experience with different social media tactics and channels. We can measure what is going on, we can be strategic with what is available and how to apply it. Now we will see the maturity of social media and how it gets integrated into operations for the next 5 to 10 years. I think it was IBM research that said that a smartphone now has more computing power than the entire world did in 1950. The devices will just get smaller, faster, better, the networks will get faster, but that does not mean that the businesses can match this pace of change. It will take time for companies to operate in a very social manner. Social media is heading more to maturity and integration into businesses.

KCP: Is there something you would like to emphasize, to add?

Peter Kim: We use the term “social business“ that reflects my perspective. The greatest value for this social “stuff” so to speak, is when you can take the lessons learned and apply it to all parts of business. Whether it is marketing, IT, human resources, employee management or other. There is a lot of value to be unlocked through collaboration, through emerging technology, through new ways of connecting. So that is why I call it “social business” because it should be applied across the business. “Media” as a term, social media is okay, I think everybody understands it. But when you start to play with the word, social media is like traditional media, and then we start to think about the media business and marketing and advertising and I think the potential and the opportunity is bigger than just marketing and communications.

 

Data sourced from: http://www.emarketer.com/

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